February 16, 2018 / 12:32 PM / a year ago

Campbell Soup organic sales fall as customer dispute continues

FILE PHOTO: FILE PHOTO: Cans of Campbell's Soup are stocked on a shelf at a grocery store in Phoenix, Arizona, February 22, 2010. REUTERS/Joshua Lott/File Photo/File Photo

(Reuters) - Campbell Soup Co (CPB.N) on Friday reported a 2 percent drop in organic net sales in its second quarter as a key customer in North America placed fewer orders for its canned soups.

Shares of the world’s biggest soup maker fell 2.1 percent to $46.70 in premarket trading.

Fewer orders from Walmart Inc (WMT.N) have weighed on Campbell’s earnings in the reported quarter and could be a major reason for a decline in sales of canned soups in the U.S., RBC Capital Markets analyst David Palmer wrote in a pre-earnings note.

Organic sales in the company’s Americas simple meals and beverages unit, which make canned soups and V8 juices, fell 4 percent.

Still, the company reported net sales that beat estimates marginally helped by a rise in demand for its Pepperidge Farm Snacks.

Net earnings attributable to the company rose to $285 million, or 95 cents per share, in the second quarter ended Jan. 28, from $101 million, or 33 cents per share, a year earlier.

The reported quarter benefited from a $124 million gain related to the overhaul of the U.S. tax code.

Excluding items, the company earned $1 per share on net sales of $2.18 billion.

Analysts on average had expected the company to earn 81 cents per share on revenue of $2.16 billion, according to Thomson Reuters I/B/E/S.

Reporting by Jaslein Mahil and Uday Sampath in Bengaluru; Editing by Shounak Dasgupta

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